AT&T is following through with its promise to electronically monitor its network for pirated video content. The telco has joined NBC Universal and Disney to invest a combined $10 million in Vobile, a small company marketing VideoDNA, a video content identification technology, “Businessweek” reported.

AT&T is in talks with NBC Universal and Disney about using Vobile’s marking and tracking technology to guard against illegal distribution of its shows and films, the business publication reported.

AT&T said last June that it would work with content owners to develop filtering technology to prevent copyright infringement. However, AT&T has infuriated privacy advocates, who have already criticized the telco for its role in helping the Bush Administration tap phone lines of American citizens.

“They better be very careful,” Lee Tien, a staff attorney with the Electronic Frontier Foundation (EFF), told “Businessweek.” “This is serious, serious stuff, to basically invade the privacy of all of your subscribers.”

“Businessweek” noted that backers of net neutrality, who fear that carriers will restrict or impose higher fees for some forms of traffic, will probably oppose AT&T’s move. That’s because the Vobile system potentially could be used to shut off or slow down traffic, for example, content owned by a rival, or a controversial documentary.

Others doubt such technology would ever work. Fred Van Lohmann, another EFF lawyer, told “Businessweek” that, “every technology person who has thought about this thinks that the moment such a technology is deployed, all the file-sharing stuff will just be encrypted — driving it further underground.”

In recent tests held by the Motion Picture Association of America, sources told “Businessweek” that Vobile’s VideoDNA performed better than a dozen or so other systems when it came to identifying pirated content — even clips that had been altered by hackers hoping to avoid detection.

It did so, the report said, without generating many false positives or instances where it claimed piracy when none had occurred. That’s considered critical for any filtering system, “Businessweek” said, as net service providers fear the backlash that would occur if they wrongly accused customers.

The Vobile’s VideoDNA system analyzes each video clip uploaded to a network before it becomes available to the user community, and then applies business rules according to rights holders’ specifications.

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